UEM Land is the largest land owner in Nusajaya, a key development area in Iskandar Malaysia, Johor. Its township development is set to benefit from closer ties between the Malaysian and Singapore governments.
CLSA Asia-Pacific Markets analyst Chee Wei Loong says that price differential remains wide with land in Singapore at least 40 times more expensive than in Johor.
“There have been talks to improve the economic linkages between Singapore and Malaysia, which will be a catalyst to improve property values in Johor,” he says.
The proposals include potential investments by the Singapore government in two iconic projects: building of a third link between the two countries and expansion of Singapore’s Mass Rapid Transit system to Johor Baru.
Khazanah Nasional has planned investments of about RM7bil, including the building of a RM1.1bil coastal highway linking Johor Baru to Nusajaya.
It is spearheading the development of a new financial district, education hub, international resorts and theme parks on 4,500 acres of land acquired from UEM Land in 2007.
“UEM’s share price is trading at a steep discount to an estimated RNAV/share of RM4. We believe newsflow of potential investors in Nusajaya, rather than immediate-term earnings prospects, will be a re-rating catalyst says Chee.
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